A party to mark the release of the Hyde Park bomb suspect, whose trial collapsed sparking a political crisis, has been cancelled.

John Downey, a Sinn Fein member accused of planting the 1982 explosive, said he has called off the gathering in a village pub in north Donegal over concerns it was being turned into a media circus.

The 62-year-old former oyster farmer said the party had been planned as a simple get together of family, friends and neighbours who supported him after his arrest.

"Some elements of the media are portraying the event planned for tonight as triumphalist and insulting to bereaved families. That was never what it was about," he said.

Mr Downey denied any involvement in the Hyde Park bomb.

His trial for the IRA attack, which spectacularly collapsed in London during the week, sparked near chaos in Downing Street and Northern Ireland's devolved government.

A judge ruled he could not stand trial as he had been given assurances by the Police Service of Northern Ireland he was not wanted for questioning or prosecution in the United Kingdom despite the Met police holding a warrant for his arrest.

The case saw the release of details a deal the last Labour government struck with Sinn Fein that saw more than 180 individuals issued with letters making clear they could return to the UK because the authorities were not seeking them.

The Government has been challenged to immediately stop consideration of five active cases involving on-the-run IRA terror suspects.

Mr Downey said he would never try to insult or add to the hurt of bereaved people by hosting the party.

About 500 guests were expected at the Lagoon bar and restaurant in Termon near Letterkenny with Sinn Fein MP Pat Doh erty, who does not take his Westminster seat, and Stormont Assembly member Gerry Kelly among senior party figures originally planning to attend.

"Some elements of the media are portraying the event planned for tonight as triumphalist and insulting to bereaved families. That was never what it was about," Mr Downey said.

"On the contrary, since long before the Good Friday Agreement I have been working to promote peace and reconciliation between our people on this island, meeting with members of Loyalism and Unionism in trying to put the past behind us and move into the future in peace together.

"My goal is, as it always was, a united Ireland where everybody is equal.

"I would never try to insult or add to the hurt of anybody who is bereaved as I am only too aware of their pain as there are many bereaved families also in the republican community."

The issue of so-called On-The-Runs - publicised by the Downey case - threatened to bring about the collapse of Northern Ireland's power sharing government and snap assembly election after First Minister Peter Robinson warned he would resign unless an inquiry was launched and letters rescinded.

A judge is examining the entire OTR issue but the letters remain in place.

While the majority of the cases were dealt with under the last government, almost 40 outstanding applications were taken on by the coalition Government when it assumed power in 2010.

Five cases apparently remain to be decided, with the Northern Ireland Office (NIO) understood to be still deliberating on whether letters should be issued.

Sinn Fein president Gerry Adams claimed the entire controversy around OTRs was a sham crisis.

Following a meeting with senior party figures in Dublin, Mr Adams accused unionist leaders of deliberate misrepresentation of an entirely legal system of issuing letters to former and current terror suspects.

"The fact is that there was no agreement between Sinn Fein and the British government on how to resolve the issue of OTRs," he said.

"Those who received the letters, as they are entitled to, were citizens who were not wanted by the British forces and they received their letters because this was the case."

Mr Adams added: "It is important to understand that the letters provided cannot be rescinded. If you're not wanted - you're not wanted."

And he called for any other person who seeks information from authorities on their status to be treated the same under human rights laws.

"The letter that those who made an application received makes it clear that if any evidence emerges of any offence then the person receiving the letter can expect to face due process," he said.

"Clearly, despite all of the feigned brouhaha and hot air generated by unionist leaders this process is not an amnesty."

Mr Downey was charged with murdering four soldiers in the Hyde Park attack after being stopped at Gatwick airport on his way to Greece in May last year.

The case against him was ended because government officials mistakenly sent him one of the assurance letters in 2007 telling him he was no longer a wanted man.

Sinn Fein insist letters sent to OTRs were nothing more than official confirmation from the authorities that there was no evidence linking individuals to offences, and not in any way an amnesty.

Deputy First Minister Martin McGuinness claims the fact other republicans were denied letters - and told they would be arrested if they entered the UK - proves his point.

Nationalist politicians in Northern Ireland also claimed unionists have been aware of the scheme for a long time - noting references to it in a number of public forums, reports and publications in recent years - and further claimed the angry reaction to the issue this week had been "contrived" to deflect the public away from that fact.

Meanwhile, DUP leader Mr Robinson has accused former prime minister Tony Blair of a "deliberate deception by omission" by failing to tell the majority of politicians in Northern Ireland about the agreement his government struck with Sinn Fein.

The crisis at Stormont compounded difficulties party leaders have had agreeing on stalled proposals for dealing with outstanding peace process issues, including the toxic legacy of the past, drawn up by former US diplomat Dr Richard Haass.

Sinn Fein was not the only group to seek information on named individuals.

According to the judgment in the Downey case, an NIO briefing note from September 2002 recorded 162 names provided by Sinn Fein - 61 of whom were told they could return.

The document also stated that the Irish Government sought information on two people and the Prison Service information on 10.

The Department of Justice in Dublin clarified that it did not issue any letters to any individuals in respect of OTR issues.